Deutsche Bank slammed by German regulator over Libor response
Tuesday, January 7th, 2014 By
German investment bank Deutsche Bank has been criticised by the country’s financial regulator over its management’s response to an investigation into the fixing of Libor rates, according to Der Speigel.
The report, which was leaked to the German newspaper, suggests that the Federal Financial Supervisory Authority (BaFin) slated the bank for its lack of effort in investigating and clearing up events relating to the Libor scandal.
The paper quoted BaFin on Sunday as saying, “The Ernst & Young report shows that insufficient efforts were made to investigate and clear up events in the bank”, adding there was a lack of clarity over “whether senior management was involved in or had knowledge of possible manipulation attempts”.
“We reiterate as per the current status of the investigations, we can say that no current or former member of the management board had any inappropriate involvement”, a Deutsche Bank spokeswoman told Reuters.
The Libor scandal was an event in which multinational banks rigged the benchmarks for interest rates, leading to a surge in profits on interbank lending. Barclays, UBS, the Royal Bank of Scotland and Dutch bank Rabobank have all been fined for various misdemeanours.
The European competition commissioner Joaquín Almunia said in November that trust within banking had been severely damaged by the scandal, saying that manipulation could be more widespread than initially thought.
“Before Libor, people thought benchmarks could be trusted”, he said.
“Now there’s a presumption that there’s a risk of manipulation. Perhaps manipulation is not the exception but the rule.”
Although BaFin has refused to comment on the leaked report, it is thought that this emergence will put further pressure on Deutsche Bank to conduct its own inquiry in order to restructure senior management.
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